Gibraltar prepares for hard Brexit as EU excludes Rock from ‘no deal’ contingency plans

The European Union has excluded Gibraltar from the scope of short-term contingency measures announced yesterday to limit disruption if the UK leaves the bloc without a deal next March.

The measures were unveiled by the European Commission and seek to mitigate the impact of a hard Brexit on air traffic, financial services and trade.

But the Commission said they “…will not apply to Gibraltar”.

The development came as Gibraltar’s Brexit team returned from meetings in London to discuss planning for measures to mitigate the impact of a hard Brexit.

“The preparations for a no deal Brexit do not mean that this is going to happen,” said Deputy Chief Minister Dr Joseph Garcia, who oversees the work of preparing Gibraltar for withdrawal from the EU.

“It means that we need to plan for it in case it does. There is no need to panic.”

“However, citizens and businesses need to be aware of the implications of leaving the EU without a deal, in order to mitigate the effects of this. The Government will itself take the lead in many areas.”

“Gibraltar voted to remain in the European Union. Our best deal would be the withdrawal of the Article 50 letter and staying in the EU with the UK.”

“However, the UK is leaving and if they go, we must go as well.”

“Our historical, cultural, political, social and economic ties are with the United Kingdom and Brexit will not alter that.”

‘NOT SURPRISED’

The Commission's measures announced yesterday cover transport, financial services, customs and border checks, taxation and climate change and will need to be backed by the European Parliament and the 27 countries remaining in the EU.

The potential implications of Gibraltar’s exclusion from the EU’s contingency measures were unclear last night, although officials said it related to the Rock as a territory, rather than to individual citizens.

Officials said the rights of Gibraltarians, who are British citizens, would be protected alongside other EU and UK citizens by reciprocal arrangements on issues such as residency rights and visa-free travel.

On issues such as air travel, officials said flights between the Rock and the UK would likely be unaffected by withdrawal from the EU. International conventions mean airlines would still be able to fly through EU airspace and land in EU airports in the event of diversions or emergencies.

But a no deal scenario could complicate the flow of goods from the UK through the EU to Gibraltar, while companies offering services into the single market would not enjoy a cushion to soften the landing beyond March next year.

Last night, the Gibraltar Government said it was examining the Commission’s announcement in detail.

But it added: “The Government is not surprised by this latest situation which reflects the position only of the EU27 and not of the UK.”

“The Gibraltar and UK Governments continue to work closely as we prepare for every eventuality in order to mitigate the impact of a possible no deal Brexit.”

“This is the reasonable thing for responsible Governments to do given the absence of an agreed Withdrawal Agreement at this time.”

And in a thinly-veiled swipe at the GSD, which has criticised the government’s backing of the Brexit Withdrawal Agreement, No.6 Convent Place added: “This latest development serves to demonstrate, however, the importance of leaving the European Union with a Withdrawal Agreement in place for Gibraltar, which some appear not to have appreciated.”

COUNTDOWN

With just 100 days until Brexit, Prime Minister Theresa May's failure to find parliamentary backing for her divorce agreement means the UK – and by extension Gibraltar - now faces three main choices: agreeing a last-minute deal, halting Brexit or leaving the EU without a deal.

No deal means there would be no transition so the exit, set in law as 2300 GMT on March 29, would be abrupt. Bank of England Governor Mark Carney said leaving the EU with no transition could be akin to the 1970s oil shock.

With fears growing that the political brinkmanship in London could lead, as Mrs May has warned, to Britain leaving without a deal, businesses and the EU's executive ramped up planning for such an eventuality.

"Businesses of all sizes are reaching the point of no return, with many now putting in place contingency plans that are a significant drain of time and money," the heads of Britain's five biggest business lobby groups said.

European Commission President Jean-Claude Juncker said a disorderly Brexit would be an "absolute catastrophe".

Yesterday Chief Minister Fabian Picardo and Deputy Chief Minister Dr Joseph Garcia returned from London, where they attended a lengthy meeting with UK ministers and officials together with the Attorney General Michael Llamas.

The no deal preparations were high on the agenda in those discussions with senior officials at the Foreign and Commonwealth Office and the Department for Exiting the European Union.

The Chief Minister has designated the Deputy Chief Minister to deal with the logistical aspects of no deal planning and the Attorney General to coordinate the intensive legislative programme which will arise in such circumstances.

The Deputy Chief Minister chaired a meeting last week with different Heads of Department and related agencies in order to set out the policy priorities of the Government.

The meeting included the Chief Secretary, who leads a working group of officials, with the civil service and public sector set to play an important part in plans for a no deal exit.

The Government said it had prepared an impact study on the consequences of different types of Brexit as early as 2016, within weeks of the referendum decision. This involved consultation across the public and private sectors and led to feedback from different entities.

In the autumn of 2017 there was another round of consultation on more specific proposals with a number of public and private sector bodies, the government said. The Chamber of Commerce was given a confidential briefing at their request.

There have, in addition, been discussions with the Ministry of Defence and The Convent, while the Brexit Select Committee of the Gibraltar Parliament was briefed after the summer.

However business organisations including the Chamber have expressed concern at the lack of up-to-date information from the government on contingency plans.

They have called for greater clarity on what a ‘no deal’ exit will mean in practice for Gibraltar, and what else needs to be done to prepare.

Yesterday, No.6 Convent Place said the Cabinet was briefed on Monday on the main areas where a no deal Brexit would be expected to have an impact.

The Government has continued with the publication of Technical Notices in preparation for a hard exit. The first set of guidelines on passports, the second on pet passports and the third on driving licences and motor insurance have already been issued. More will follow.

Earlier this year, the Chief Minister told the House of Lords’ EU select committee that Gibraltar would step up its implementation programme for a no deal Brexit as from January 1 unless an agreement was in place.

“In doing so, we will rely on great measure also on the work of our excellent public servants, in the Civil Service, the GDC and the wider public sector,” Mr Picardo said last night.

“We will be applying the same principles in our planning as have been applied…in the United Kingdom.”

“We will also be working more closely now with the private sector and unions to coordinate our positions across the community so that our National Readiness Action Plan is ready to kick in by the time a no deal might become an unfortunate reality which we will continue to work to avoid.”